Saturday, June 18, 2016

Cyprus central bank lifts growth forecast


The Central Bank of Cyprus has significantly upgraded its projections over the growth of the Cypriot economy in 2016 citing “better than expected recent economic indicators as well as preliminary data for Cyprus` GDP in the first quarter.”

According to the CBC’s bi-annual economic bulletin, the Cypriot economy will grow by 2.7% in 2016 from 2.0% in the December`s Bulletin, while economic growth in 2017 will accelerate to 2.9% from 2.7% in the previous projection. The CBC also estimates economic growth will reach 3.3% of GDP in 2018.


“The banking sector is recovering with the latest data suggesting that non-performing loans may have reached their peak,” the CBC points out, pointing out “loan write downs have significantly increased in March 2016 pursuant to the broader effort towards the banking sector consolidation."

Tourists are pouring in and setting records:

Bailed-out Cyprus has recorded its best ever tourist arrivals figures for the month of May, tourism officials said on Friday.

The state-run Cyprus Tourism Organization said in a statement the 364,943 tourists who arrived on the eastern Mediterranean island in May were the “highest ever recorded” for that month.

In May there was an 18.7 percent hike in arrivals compared with the same month in 2015 when 307,449 arrived, indicating that the economy is on an upward curve, official data showed.

Even the central bank of Cyprus is saying the worst is over for the banking sector and the economy is rebounding nicely with tourism setting records. I expect that Cyprus will see many tourists that would have went to other resort areas that are in Muslim countries like Egypt, Tunisia, Turkey, etc... The listing of Bank of Cyprus in London sometime in the third quarter coupled with declining bad loans should be a catalyst for a higher share price. The backing of several billionaires (Wilbur Ross) versed in turning around various businesses doesn't hurt either. 

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